Over half of Hong Kong companies won’t downsize their offices, although cost remains a top priority

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Companies in the insurance sector (50%) are most inclined to expand their premises, whereas those in the shipping & logistics sector (47%) are most likely to reduce their office space.

Amidst macroeconomic uncertainties, rental costs have become a top priority for companies in Hong Kong, according to the latest survey by Colliers.

The results revealed that 71% of Hong Kong companies surveyed are taking neutral to positive stances on their business outlook, which dropped by seven percentage points compared to last year. As such, more than a quarter (27%) of companies are looking to downsize their office footprint.

Cost optimisation (67%) was cited as the top reason for their plan to downsize their office footprint, followed by shrinking business demand (60%).

Despite this, more than half (54%) cited no change to their current office size, a similar percentage (53%) compared to last year.

More positively, about one-fifth (19%) even look to expand their premises because of increasing business opportunities in Hong Kong (60%) and inadequate space for their current business operations (59%).

Segmented by industries, companies in the insurance sector (50%) are most inclined to expand their premises, followed by those in the legal services (33%) and banking & finance (27%) sectors. In contrast, the shipping & logistics sector (47%) is most likely to reduce their office space.

Cost optimisation is a top priority in selection of office premises

The survey showed that the factors to consider when selecting an office unit are:

Meanwhile, factors to consider when selecting an office location / district are:

The survey further indicated that to large firms, floor plate size (36%) is crucial in designing a flexible layout that can lower the cost of future redesigns. On the other hand, the prestigiousness of location, such as the Central Business District (CBD), ranked high amongst the banking & finance (70%) and legal services (62%) sectors.

However, significantly lower percentages of companies in CBD fringe areas plan to stay in the same district. Companies in these areas would prefer to either move into CBD or further away from it to look for better value in locations.

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Infographics / Colliers